National Rental Affordability Scheme Dropped

The Federal Government announced in the Federal Budget that it would not proceed with the final round of the National Rental Affordability Scheme.

Social Services Minister Kevin Andrews said that from the beginning, the previous government’s scheme was poorly designed, with multiple flaws, ambiguous legal requirements and red tape.

“The National Rental Affordability Scheme has fallen well short of expectations—it has simply failed to deliver for low and moderate income Australians,” he said.

“The scheme has been plagued by the late delivery of dwellings, trading of incentives, multiple changes to agreed locations, leasing to international students and rorting.

“Incentives already allocated through the scheme will continue to be paid for up to 10 years, as long as eligibility requirements are met and homes in the construction pipeline are built in the agreed locations according to agreed timeframes.

“The scheme will be reviewed to address ongoing issues and ensure remaining incentives meet the scheme’s original aim.

“In consultation with states, territories, investors, developers and the housing sector, we will look at how the scheme can best meet its objectives, stamp out trading of incentives, target Australia’s most in need, and reduce red tape and ambiguity.”

The Minister said the Government was investing up to $115 million into the National Partnership Agreement on Homelessness, to be matched by the states and territories.

“This will enable hundreds of critical homelessness services to continue, providing them with the peace of mind to stay open, keep their staff and continue to support some of Australia’s most vulnerable people,” he said.

Housing Not for Profit National Shelter Executive Officer Adrian Pisarski said the budget retreats from implementing reforms to affordable housing supply, social housing programs and homelessness service delivery, but he was hopeful that over the next 12 months a plan may arise from the ashes of these programs.

"It appears that housing supply for those who can't find it is again left up to market forces which have consistently failed to deliver it in the past and now have any incentives to improve it removed in the future," Pisarski said.

“The Treasurer said in his budget speech ‘It is time, for all of us, to contribute and build’. But this won't apply to affordable housing. The budget does little to address the structural issues which contribute to homelessness and housing stress, no changes to Negative Gearing, Capital Gains Tax Exemptions but hits to youth and elder incomes.

"Over the past five years the housing and homelessness sectors, including NGOs, business and governments, have made significant reforms that are making a difference to supply, affordability and reducing homelessness, we now risk losing that momentum.

"For modest government outlays NRAS a was delivering significant boosts to affordable rental housing supply and could have been adjusted to a new governments standards, it is the large reform we have now lost.

"It allowed massive private investment, was drawing in institutional investment, contributed to the development of the NGO housing sector and the reform of social housing by States. That process may now also be lost,” he said.

Treasurer’s Budget speech is HERE

The details of the Budget’s Social Services package can be found HERE

The Budget Papers can be found HERE